Taxes. Especially relevant if you’re trying to balance possible gains (taxable) against possible losses (which may not lead to corresponding tax reductions).
Counterparty risk. The more complicated the scheme, the more likely there’s some risk involved that you don’t understand.
Sudden regulatory changes. Eg, your government suddenly outlaws bitcoin.
The possibility that you’re just wrong. You might think that AlphaGo signaled good times for GPU manufacturers, but did you also think some years ago that the hype about nanotechnology could lead you to profitable investments? EMH advocates have never claimed that you can’t make money by investing based on your predictions about future technologies—if you happen to be right.
Returns for the safe trades I discuss more than compensate for counterparty risks. Of course, you will incur short-term capital gains doing these trades. But the returns I am describing are extremely lucrative and more than compensate for the tax treatment.
Do you do your own taxes? If so, how much more difficult do they become after all of this niche activity? How long did they take you to finish this year and last?
I see three things missing from your examples:
Taxes. Especially relevant if you’re trying to balance possible gains (taxable) against possible losses (which may not lead to corresponding tax reductions).
Counterparty risk. The more complicated the scheme, the more likely there’s some risk involved that you don’t understand.
Sudden regulatory changes. Eg, your government suddenly outlaws bitcoin.
The possibility that you’re just wrong. You might think that AlphaGo signaled good times for GPU manufacturers, but did you also think some years ago that the hype about nanotechnology could lead you to profitable investments? EMH advocates have never claimed that you can’t make money by investing based on your predictions about future technologies—if you happen to be right.
Returns for the safe trades I discuss more than compensate for counterparty risks. Of course, you will incur short-term capital gains doing these trades. But the returns I am describing are extremely lucrative and more than compensate for the tax treatment.
Do you do your own taxes? If so, how much more difficult do they become after all of this niche activity? How long did they take you to finish this year and last?